The Illinois budget is better than nothing, but not by much

The passage of a state budget ahead of the traditional May 31 deadline shouldn't be cause for celebration in any normal universe. But we live in Illinois. Therefore, the ratification of the first-ever on-time spending plan of the Rauner administration was an occasion for immense relief if not outright joy. Of course, just to keep things interesting, the General Assembly managed to string the drama out until very nearly the last minute, reality TV-style. But in the end, both sides managed to come together to approve a $38.5 billion spending plan for fiscal year 2019, which starts July 1, and avert the upheaval that might have befallen us if our dysfunctional politics had given Wall Street yet more reason to ding Illinois' credit rating.

When Springfield finished patting itself on the back, however, a few things became clear to those who cared to look beyond the top-line numbers. One is that this budget can only be called balanced if you're willing to look at it through rose-colored glasses. Just one example: The budget counts on reaping $300 million from selling the Thompson Center in the Loop to a private developer, despite a feud between Gov. Bruce Rauner and Chicago Mayor Rahm Emanuel that has stalled such action for two years.

And by relying on increased revenues from President Donald Trump's tax "cut," the state actually is accepting a tax increase that no one much wants to talk about.

But the biggest problems with the budget relate to the cost of public employee pensions and benefits. The budget doesn't include Rauner's proposal to shift some costs of public employee pensions to local governments. And it relies on the hope that union pensioners will be willing to trade their current annual cost-of-living increases—a major driver of pension cost inflation—for a smaller COLA in exchange for a lump sum that they could invest themselves. Will enough employees grab that offer? No one knows. But the budget assumes $380 million in savings via this accelerated benefits program, which would have to be financed by a $1 billion loan.

Meanwhile, Moody's Investors Service has also taken a dim view of the state's budget math, observing that the combination of debt service and required payments for pensions—now underfunded to the tune of $135 billion and counting—will exceed 30 percent of total state spending in the coming year. Moody's notes that we'll push past that 30 percent threshold through a combination of borrowing, like the recent $6 billion bond issue to retire old debt, and an 8.5 percent required boost in pension contributions this year.

The 2019 budget exposes the challenges facing the next governor, whether that's Rauner or his Democratic foe, J.B. Pritzker. To truly bring our government's spending back into balance, either big cuts—which have proved politically and legally elusive—or more tax hikes are inevitable. Rather than a one-off spending plan that only carries us a few months until the next political showdown, what Illinois needs more than anything is a long-term plan for fiscal stability. This budget isn't that—not by a mile. It's time for both gubernatorial candidates to lay out an honest and straightforward plan that spells out in painstaking detail their vision for solving the state's most vexing fiscal problem. Discussion of almost anything else is a distraction that allows the candidates to dodge the toughest questions we face as a state. We're not going to let either one of them get away with that—and neither should you.